Poultry News

Brazil’s Soy Production Expected to Increase Sharply

22 July 2016

BRAZIL - Brazil features over 75 million hectares of underused pasturelands which could be turned into productive cropland, according to Rabobank.

Brazil is a natural candidate for responding to increased grain and oilseed demand by increasing supply, especially of soybeans - its main export grain commodity, suggests the Rabobank report 'Build it and they will come; The impact of port expansion on Brazilian soybean production and exports'.

The report says the outlook for the global demand for grains and oilseeds is very promising for the near future, as developing countries move to a higher-protein diet. Global demand for animal feed is set to increase, since grain comprises over 70 per cent of conventional animal feed ingredients.

Lacking port capacity and a history of underinvestment in port terminals has, however, remained a key bottleneck for Brazil when it comes to fully realising its grain trade potential.

Yet, according to Grains & Oilseeds Analyst Renato Rasmussen at Rabobank: “Large investments being made by the private sector in port facilities in the so-called "Northern Arc" tend to motivate an increase of approximately 16 million tons of Brazilian soybean exports by 2025. As a result, Brazil’s soy area is expected to experience a drastic increase in the coming years."

Victor Ikeda, Farm Inputs Analyst at Rabobank says: “About 4 million hectares of underused pastureland should go through this conversion in the next five years. In a decade, 9 million or 10 million hectares are expected to have been turned into productive cropland.

"This represents outstanding opportunities not only for farm inputs companies but to the entire Brazilian agribusiness.”